Apple closes in on Microsoft, finally. Fantastic.
Note from Ron: David Porter doesn’t know how to read this chart or what it means. Apple makes almost as much money with a smaller marketshare. This is a bad thing. NOT a good thing. Apple fanboys are idiots. There I said it. Idiots. I can’t understand how someone could be happy about high profit margins. I honestly can’t. Fucking stupid. How can anyone be happy about spending more money on a product? To be very clear: AS AN APPLE CONSUMER THIS GRAPH IS VERY BAD FOR YOU!
Ron, I’m a finance guy (though you’d never guess it if you met me), and your explanation is inaccurate (or at least the information needed to reach your conclusions is absent from this graph).
This graph from SAI shows neither market share nor how much money either company makes (generally measured as net income, EBITDA or free cashflow). In fact, Microsoft’s net income was twice that of Apple’s last quarter ($3.6bn vs $1.7bn). Even Apple’s market cap is only 70% of Microsoft’s at this point.
Market cap reflects expectations of free cashflow in the future and the associated level of risk inherent in those cashflows, and, as such, contemplates investors’ belief in a company’s market, management, brand, mission, strategy and other factors.
I’m guessing Microsoft’s share of market for software for personal computers is still quite a bit higher since PCs still outsell Macs by a large measure.
Also, Apple’s gross margin — since it makes hardware as well as software — is far lower than that of Microsoft; Apple chalked up only 36% last quarter vs 78% for Microsoft.
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